A hard-line stance against fraud and corruption in China and other countries is driving a new kind of growth in Asia. According to a recent article in the Wall Street Journal, accounting and legal firms are expanding their anti-corruption services to meet the growing demand among businesses worried about crackdowns on bribery and other fraud issues.
Indeed, China appears to be signaling a “zero tolerance” approach toward corruption, and some other governments in the region seem to be following suit. The tipping point seemed to come with the GlaxoSmithKline scandal, and since then, companies doing business in China have been put on warning that they engage in corruption at their peril. Individuals committing fraud fare no better: last July, Zeng Chengjie – dubbed by some the “Benie Madoff of China” – was executed for his role in an alleged massive financial fraud. His family, who were not notified until after his execution, have disputed the allegations and contend that political shifts had more to do with the case than pure fraud.
Nevertheless, these developments have businessmen in China and throughout Asia scrambling for legal protection. In turn, to meet demand, firms are rushing to hire more compliance and anti-fraud experts to help accommodate the growing need for advisory services in the field.
The response is not just reactionary. The Wall Street Journal piece reports: “To a certain extent, the expansion in Asia is rooted in anticipation. Law firms are expecting a heightened focus on corruption by Asian governments, which could translate into more business, according to Doreen Jaeger-Soong, managing director of Hughes-Castell, a legal recruitment firm.”
There is also more concern among Western companies that do business in Asia in terms of whether their partners, or potential partners, can meet stringent Western anti-corruption laws (most notably, perhaps, the relatively young UK Bribery Act).
This huge issue is why CRI Group is so committed to due diligence services and compliance services. Our experts are already rooted in Asia and other areas around the world, helping companies stay within the legal requirements necessary in business today. Just as important, though, our 3PRM Strategy is designed to help protect organisations from problems with partners and vendors. In this new anti-corruption climate, just appearing to be connected with a corrupt company can lead to disaster.